Woolies stretches its lead over Coles

Woolworths has extended its lead on Coles - growing its sales at a healthy clip as the performance of its major rival lags behind.

The Woolworths group's like-for-like sales at Australian supermarkets rose 4.9 per cent to $9.63 billion in the 14 weeks to October, compared to a sluggish 0.4 per cent growth in comparable sales at Coles.

It is the fourth consecutive quarter in which Woolworths has outpaced Coles on sales growth.

Shares in Woolworths rose on the strong result, gaining 58 cents, or 2.3 per cent, to $25.88 - a near-two-month high.

The group's hotels division, which includes poker machines, had a comparable sales lift of 4.1 per cent to $441 million with bar sales being the highlight thanks to sporting events and promotions.

And its struggling department store Big W posted sales of $890 million with a 2.9 per cent lift in comparable sales, driven by discounting products by an average 20 per cent.

Citi group analysts said Woolworths is its "preferred pick" in the Australian supermarket sector because it has sustained its strong food sales growth and because Big W was showing signs of improvement.

"Big W has shown early signs of positive traction with its repositioning, particularly after a strong period of price investment," the analysts said in a statement on Tuesday.